CASH flush Tharisa Minerals paid its highest-ever full year dividend during the financial year ended September 2021 as profits doubled, buoyed by the strong metal price environment.
Tharisa, which operates the Tharisa Mine in the North West, declared a 5 cents a share final dividend bringing the total dividend for the year to 9c a share up 157 percent from 3.5c a share declared a year earlier. The 9c a share dividend represents a payout ratio of 18.5 percent and is higher than the group’s policy of paying at least 15 percent of net operating profit after tax.
The JSE-listed chrome concentrate and platinum group metals (PGMs) producer ended the year with a net cash position of $46.6 million (R739m) and posted an $178.8m operating profit up a staggering 104 percent from $87.6 m in 2020. Profit before tax surged by 144.5 percent to $185.3 m up from $75.8m a year earlier.
Chief executive Phoevos Pouroulis said :“This has been a stand out year for Tharisa on all levels.”
Not only did Tharisa’s revenue increase by 47 percent to $596.3m, group earnings before taxation, interest, depreciation and amortisation doubled to $224.3m.
“These are exceptional numbers especially in light of the pandemic. The strong operational performance translated into healthy cash flow generation, enabling the company to invest in its sustainable growth and deliver a record dividend to shareholders,” Pouroulis said.
The group has expanded its footprint into Zimbabwe through the acquisition of Salene Chrome Zimbabwe in May. Salene Chrome is situated in the Great Dyke of Zimbabwe said to contain the world’s largest PGM and high-grade chrome deposits outside South Africa.
The group also expects the Vulcan Plant to generate significant chrome production.Tharisa also extended its open-pit mining reserves by seven years to 2041 after a review of the company’s mineral resources and reserves, translating to a 30 percent increase in open-pit tonnage to 94.2 million tons.
Tharisa rode the wave of record PGM prices for the second consecutive year with an 80 percent increase in prices.
Average PGM prices soared to $3 074 an ounce for the year under review, up from $1704 an ounce a year earlier and in rand terms the basket price averaged a whooping R45 336 an ounce, up from R27 691 an ounce in 2020, and compared with R15 531 an ounce in 2019. Strong rhodium prices saw rhodium contribute 60 percent of PGM revenues.
The group said the longer-term fundamentals for precious metals were robust, driven by the healthy outlook for the internal combustion engine. Chrome prices increased by 10 percent to $154 a ton while metallurgical chrome prices were $164 a ton. The group said it had marked six years fatality free.